Section 25 of the Prevention of Money Laundering Act, 2002 is deceptively short, yet it anchors the entire appellate architecture of India's anti-money-laundering regime. It identifies the body that hears appeals against the Adjudicating Authority and against orders of the Director, and so determines where a person whose property has been provisionally attached or whose attachment has been confirmed must go before reaching the High Court. After the Finance Act, 2016 the section no longer creates a fresh tribunal at all: it borrows the Appellate Tribunal already constituted under the SAFEMA, 1976, folding money-laundering appeals into a multi-statute forum. This chapter unpacks the text, the legislative re-engineering of 2016 and 2017, the composition battles fought in Rojer Mathew and Madras Bar Association, the mechanics of appeal under Sections 26, 35 and 42, and the practical pathologies of vacancy and delay that the Supreme Court itself flagged in Vijay Madanlal Choudhary.
The text of Section 25 and its place in the scheme
Section 25 falls in Chapter VI of the PMLA, the chapter that builds the adjudicatory and appellate machinery. In its pre-2016 form it read that "the Central Government shall, by notification, establish an Appellate Tribunal to hear appeals against the orders of the Adjudicating Authority and the authorities under this Act." The provision was therefore a creating provision: it commanded the executive to constitute a dedicated PMLA tribunal. The Adjudicating Authority decides, under Section 8, whether a provisional attachment under Section 5 should be confirmed; Section 25 then supplies the appellate forum to test that confirmation, and Section 26 supplies the right of appeal itself.
It is important to keep Section 25 distinct from the sections around it. Section 25 only identifies and constitutes the forum. Section 26 confers the right of appeal and prescribes limitation. Sections 27 to 34 deal with composition, qualifications, terms, resignation, staff and so on (several of these have since been displaced by general tribunal legislation). Section 35 lays down the procedure and powers of the Tribunal, and Section 42 carries the matter onward to the High Court. Read together they form a self-contained appellate code, and the recurring litigation has been about how much of that code survives the wholesale tribunal reforms of 2016, 2017 and 2021.
The Finance Act, 2016: merger with the SAFEMA Tribunal
The decisive change came with the Finance Act, 2016. With effect from 1 June 2016, Section 25 was substituted so that the Appellate Tribunal constituted under Section 12 of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA) became the Appellate Tribunal for hearing appeals under the PMLA. In other words, the PMLA stopped maintaining a stand-alone tribunal of its own. Instead it pointed to an existing body. The substituted Section 25 reads, in substance, that "the Appellate Tribunal constituted under sub-section (1) of section 12 of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 shall be the Appellate Tribunal for hearing appeals against the orders of the Adjudicating Authority and the authorities under this Act."
This was part of a broader rationalisation exercise across the Finance Act, 2016, which sought to reduce the proliferation of single-purpose tribunals by merging several into common forums. For the PMLA the consequence was immediate and continuing: a money-laundering appellant now appears before a tribunal whose members also dispose of SAFEMA forfeiture appeals. The substantive law applied remains the PMLA, but the institution is shared. Students should be careful to state the law as it now stands: Section 25 no longer requires the Central Government to create a tribunal; it adopts the SAFEMA Tribunal by reference.
The Finance Act, 2017 and the multi-statute tribunal
The consolidation deepened a year later. By the Finance Act, 2017 the Appellate Tribunal for Foreign Exchange, constituted under Section 18 of the Foreign Exchange Management Act, 1999 (FEMA), was also merged into the SAFEMA Appellate Tribunal. The result is that a single Appellate Tribunal today hears appeals under at least five central statutes: SAFEMA, 1976; the Narcotic Drugs and Psychotropic Substances Act, 1985 (in respect of forfeiture of illegally acquired property under Chapter VA); the PMLA, 2002; the Prohibition of Benami Property Transactions Act, 1988 (as substantively amended in 2016); and FEMA, 1999.
For the money-laundering practitioner this matters for two reasons. First, it explains why the forum is administratively styled the Appellate Tribunal under the Department of Revenue rather than a "PMLA Appellate Tribunal" in any exclusive sense. Second, it explains the chronic capacity strain: one composite body absorbs the appellate load of several enforcement statutes, which is precisely the pressure the Supreme Court later commented on in Vijay Madanlal Choudhary v. Union of India. The doctrinal point to retain is that the merger is by reference and substitution, not by repeal of the PMLA's appellate scheme; the rights of appeal in Sections 26 and 42 continue to operate as PMLA provisions.
Composition, qualifications and the Tribunal Reforms Act, 2021
Composition has been the most heavily litigated aspect of tribunal law generally, and the PMLA tribunal has been carried along by that litigation. The original Sections 27 and 28 of the PMLA dealt with the Chairperson, Members and their qualifications, contemplating judicial and technical members and a Chairperson who is or has been a Judge. Section 28(4) even permits a person already holding office as Chairperson or Member of another tribunal to hold the corresponding office in the PMLA tribunal, an interlocking arrangement that became inevitable once the forums merged.
The conditions of service are now substantially governed by the Tribunals Reforms Act, 2021. Under that Act the Chairperson and Members are appointed by the Central Government on the recommendation of a Search-cum-Selection Committee; the term of office is four years, subject to an upper age limit of seventy years for the Chairperson and sixty-seven years for other Members. The 2021 framework was itself the product of a long constitutional tussle, and the four-year tenure in particular sits uneasily with earlier directions of the Supreme Court that favoured longer terms to secure independence. The cross-reference to general tribunal legislation means that a student must read Section 25 alongside the Tribunals Reforms Act, 2021, not in isolation, to state the current composition correctly.
Rojer Mathew and the independence of the merged tribunals
The constitutional anchor for tribunal independence is Rojer Mathew v. South Indian Bank Ltd., decided by a Constitution Bench on 13 November 2019. The challenge was to Part XIV of the Finance Act, 2017 (the very vehicle that merged the FEMA tribunal into the SAFEMA tribunal) and to the rules framed under Section 184 of that Act governing qualifications, appointment, tenure and removal of tribunal members. The Court struck down the 2017 Rules as being destructive of judicial independence and contrary to the doctrine of separation of powers, directing the Government to re-formulate them in conformity with earlier tribunal jurisprudence.
The bench separately referred to a larger bench the question whether Part XIV of the Finance Act, 2017 could validly have been passed as a Money Bill, a question that bears on the entire merger exercise affecting the PMLA forum. For PMLA purposes the takeaway is that the institutional design of the tribunal hearing money-laundering appeals is governed not only by the PMLA itself but by a line of constitutional authority insisting that the appointing process and tenure protect the tribunal's adjudicatory independence. Rojer Mathew is therefore foundational background reading for any answer on Section 25 composition.
Madras Bar Association (2021) and the tenure question
The next link in the chain is Madras Bar Association v. Union of India, decided on 14 July 2021. The petition challenged the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021, the immediate predecessor of the Tribunals Reforms Act, 2021. The Court, by majority, struck down the provisions that prescribed a minimum age of fifty years for appointment and a four-year term of office, holding that these enabled executive interference and undermined the independence and effective functioning of tribunals. It reiterated that Search-cum-Selection Committees should recommend a single name rather than a panel from which the executive picks.
The practical irony is well known to examiners: despite the Court's repeated disapproval of the short four-year tenure, the Tribunals Reforms Act, 2021 was enacted later in August 2021 and again fixed a four-year term, prompting fresh litigation. For the PMLA tribunal the upshot is that its members serve under a tenure regime that has been the subject of sustained constitutional contest. A strong answer cites Madras Bar Association (2021) for the proposition that conditions of service of the merged tribunal must respect the constitutional guarantees of independence, and notes the ongoing friction between Parliament and the Court on tenure.
The right of appeal: Section 26
Section 25 supplies the forum; Section 26 supplies the right. Under Section 26 the Director, or any person aggrieved by an order made by the Adjudicating Authority, may prefer an appeal to the Appellate Tribunal. A reporting entity aggrieved by an order of the Director under Section 13(2) may likewise appeal. The appeal must be filed within forty-five days from the date on which a copy of the order made by the Adjudicating Authority or the Director is received by the aggrieved person.
Critically, Section 26 contains its own condonation power: the Tribunal may, after giving an opportunity of being heard, entertain an appeal after the expiry of forty-five days if it is satisfied that there was sufficient cause for not filing it within that period. There is thus no outer cap on condonation at the first appellate stage, in contrast with the rigid ceiling that applies at the High Court stage under Section 42. On hearing the parties the Tribunal may pass such orders as it thinks fit, confirming, modifying or setting aside the order appealed against, and must forward copies to the parties and to the concerned authority. Section 26 also exhorts the Tribunal to dispose of appeals as expeditiously as possible, endeavouring to conclude within six months of filing, a directory rather than mandatory timeline.
Procedure and powers: Section 35
Section 35 frees the Appellate Tribunal from the rigours of the Code of Civil Procedure, 1908. The Tribunal is not bound by the procedure laid down in the CPC but is guided by the principles of natural justice, and subject to the other provisions of the Act it has power to regulate its own procedure. At the same time, Section 35 vests in the Tribunal the same powers as a civil court under the CPC for specified purposes: summoning and enforcing attendance of witnesses and examining them on oath; requiring discovery and production of documents; receiving evidence on affidavit; requisitioning public records; issuing commissions for the examination of witnesses or documents; and reviewing its decisions, among others.
Proceedings before the Tribunal are deemed to be judicial proceedings for the purposes of the penal law, and the Tribunal is deemed to be a civil court for certain purposes. The combined effect is that although the forum enjoys procedural flexibility, it functions with the evidence-gathering and order-enforcing muscle of a civil court. When an appellant challenges a confirmed attachment, the Tribunal can therefore re-examine the material on which the Adjudicating Authority proceeded and substitute its own appreciation of whether the twin requirements of "proceeds of crime" and reason to believe were satisfied, a point that connects directly to the substantive law of the offence of money laundering.
Attachment, possession and the Tribunal's interim role
The Appellate Tribunal's significance is greatest in attachment litigation. A provisional attachment under Section 5 is confirmed by the Adjudicating Authority under Section 8; the confirmed attachment continues during the pendency of proceedings before a Special Court and, under the post-2013 scheme, the Enforcement Directorate may take possession of the attached property. The aggrieved owner's principal remedy against confirmation is the appeal to the Appellate Tribunal under Section 26. In practice the Tribunal is asked not only to decide the appeal but to grant interim protection against dispossession pending the appeal.
This is where the chronic vacancy problem bites hardest. If the Tribunal is not functioning for want of a Chairperson or Members, a person whose property has been attached has no effective forum to seek a stay, and the attachment continues unsupervised. The interplay between the substantive attachment provisions and the appellate forum explains why the health of the Section 25 tribunal is not a mere administrative footnote but a due-process question. For the full mechanics of attachment, confirmation and continuation, see the chapter on attachment of property.
Onward appeal to the High Court: Section 42
From the Appellate Tribunal the route lies to the High Court under Section 42. Any person aggrieved by a decision or order of the Appellate Tribunal may appeal to the High Court within sixty days from the date of communication of the decision or order, on any question of law or fact arising out of the order. The proviso allows the High Court to admit an appeal after the sixty-day period, if satisfied that the appellant was prevented by sufficient cause, but only within a further period not exceeding sixty days.
The limitation regime under Section 42 is materially stricter than under Section 26. The proviso to Section 42 has been read as self-contained and as excluding Section 5 of the Limitation Act, 1963, so that the outer limit of one hundred and twenty days is absolute and the High Court has no power to condone delay beyond it. The Bombay High Court applied this in Assistant Director, Directorate of Enforcement v. Branch Manager, Goa State Co-operative Bank Ltd. (2025), dismissing the Enforcement Directorate's own appeal filed after the 120-day ceiling as time-barred. The lesson for any answer is to contrast the open-ended condonation at the tribunal stage with the hard ceiling at the High Court stage.
Vijay Madanlal Choudhary and the vacancy problem
The Supreme Court's omnibus PMLA judgment, Vijay Madanlal Choudhary v. Union of India (27 July 2022), is best known for upholding Section 3, the twin bail conditions and the ED's powers, but it also engaged directly with the Appellate Tribunal. Petitioners argued that persistent vacancies had rendered the appellate remedy illusory, undermining the fairness of the whole scheme. The Court acknowledged the difficulty and urged the Government to fill the vacancies promptly, recognising that an inoperative appellate forum imperils due process for those whose property is attached.
At the same time the Court held that the existence of vacancies could not be a ground to strike down the substantive provisions of the PMLA or to doubt their efficacy; the remedy lay in administrative action to constitute the Tribunal, not in invalidation. Vijay Madanlal therefore stands for two complementary propositions on Section 25: the appellate forum is constitutionally important enough that its non-functioning is a serious due-process concern, yet that concern is addressed by directing the executive to fill vacancies rather than by reading down the Act. This is the case to cite when asked about the consequences of a non-functioning Appellate Tribunal.
Benches, seat and the location of the Tribunal
Because the Appellate Tribunal is a merged, multi-statute body, questions of seat and benches recur. The Tribunal sits principally at New Delhi, and the Chairperson may, having regard to convenience, constitute benches and notify their sitting at other places. The flexibility to sit in benches is significant given the geographic spread of attachment proceedings: an appellant in a distant State should not be forced to litigate exclusively in the capital. The composite character of the forum, however, means bench strength is shared across SAFEMA, NDPS, PMLA, Benami and FEMA matters, which compounds the capacity strain discussed above.
From an examination standpoint, candidates should be able to state that the Appellate Tribunal under Section 25 is a centrally located, bench-constituted body with all-India jurisdiction over PMLA appeals, distinguishable from the Adjudicating Authority, which is itself a single body with all-India jurisdiction but exercises original rather than appellate functions. Keeping the original and appellate tiers distinct is the most common stumbling block in this topic.
Distinguishing the Adjudicating Authority from the Appellate Tribunal
A frequent confusion is between the Adjudicating Authority and the Appellate Tribunal. The Adjudicating Authority, constituted under Section 6, is the original forum: it decides under Section 8 whether to confirm a provisional attachment and whether property is involved in money laundering. The Appellate Tribunal under Section 25 is the first appellate forum: it hears appeals against those confirmations and against orders of the Director. Both are quasi-judicial, both follow natural justice rather than the CPC, and both have civil-court powers for evidence-gathering, which is why students conflate them.
The distinctions are structural. The Adjudicating Authority is PMLA-specific; the Appellate Tribunal is the merged SAFEMA body serving multiple statutes. The Adjudicating Authority's orders are appealable to the Tribunal within forty-five days under Section 26; the Tribunal's orders are appealable to the High Court within sixty (extendable to one hundred and twenty) days under Section 42. Mapping this two-tier flow, original authority to appellate tribunal to High Court, is the cleanest way to demonstrate command of the subject. For the original tier, study the chapter on the Adjudicating Authority; for the wider statutory context, return to the PMLA notes hub.
Exam pointers and common errors
First, state the current text of Section 25 correctly: it does not direct the creation of a new tribunal but adopts the SAFEMA Appellate Tribunal by reference, a change effected by the Finance Act, 2016 with effect from 1 June 2016. Answers that describe Section 25 as "establishing a PMLA Appellate Tribunal" are stating the pre-2016 position and will lose marks. Second, keep the limitation periods straight: forty-five days with open-ended condonation under Section 26 before the Tribunal, and sixty days extendable by a further sixty (a hard ceiling of one hundred and twenty days) under Section 42 before the High Court.
Third, marshal the case law in tiers: Rojer Mathew (2019) and Madras Bar Association (2021) for the independence and tenure of the merged tribunal; Vijay Madanlal Choudhary (2022) for the vacancy and due-process point; and the Bombay High Court's Goa State Co-operative Bank decision (2025) for the strict, non-condonable outer limit under Section 42. Fourth, link the appellate forum to substance: the Tribunal exists to test attachment confirmations, so cross-reference the attachment machinery. Finally, never confuse the original Adjudicating Authority with the appellate forum; the two-tier-then-High-Court flow is the spine of every good answer on Section 25.
Frequently asked questions
Does Section 25 of the PMLA create a separate Appellate Tribunal?
Not since the Finance Act, 2016. With effect from 1 June 2016, Section 25 was substituted so that the Appellate Tribunal constituted under Section 12 of the SAFEMA, 1976 is the Appellate Tribunal for PMLA appeals. The earlier version did direct the Central Government to establish a dedicated tribunal, but that is no longer the law.
Which statutes does the merged Appellate Tribunal now handle?
Following the Finance Act, 2016 (SAFEMA merger) and the Finance Act, 2017 (merger of the Appellate Tribunal for Foreign Exchange under FEMA), a single Appellate Tribunal hears appeals under SAFEMA 1976, the NDPS Act 1985, the PMLA 2002, the Prohibition of Benami Property Transactions Act 1988, and FEMA 1999.
What is the limitation period for an appeal to the Appellate Tribunal?
Under Section 26 an appeal must be filed within forty-five days of receipt of the Adjudicating Authority's or Director's order. The Tribunal may condone delay if satisfied there was sufficient cause, and there is no statutory outer cap on condonation at this stage, unlike the rigid 120-day ceiling at the High Court stage under Section 42.
Can the High Court condone delay beyond the period in Section 42?
No. Section 42 allows sixty days plus a further sixty for sufficient cause, a hard ceiling of 120 days. The proviso has been read as excluding Section 5 of the Limitation Act, so delay beyond 120 days cannot be condoned, as the Bombay High Court held in Assistant Director, Directorate of Enforcement v. Branch Manager, Goa State Co-operative Bank Ltd. (2025).
Which cases govern the independence of the PMLA Appellate Tribunal?
Rojer Mathew v. South Indian Bank Ltd. (2019) struck down the 2017 tribunal rules framed under the Finance Act, 2017 as destructive of judicial independence, and Madras Bar Association v. Union of India (2021) struck down the four-year tenure and minimum-age provisions of the 2021 Ordinance. Conditions of service are now under the Tribunals Reforms Act, 2021.
What did Vijay Madanlal Choudhary say about the Appellate Tribunal?
In Vijay Madanlal Choudhary v. Union of India (2022) the Supreme Court acknowledged that vacancies were impairing the Tribunal's functioning and urged the Government to fill them, but held that such vacancies could not be a ground to strike down the PMLA's provisions. The remedy lay in constituting the Tribunal, not in invalidating the Act.